CPA, CFP or CFA? How to Find the Right Financial Pro

If you’re not a CPA, CFA, CFP or another of the myriad acronyms used to identify financial professionals, those extra letters after someone’s name can get confusing, quick. But when you’re looking for help with financial matters, it’s important to understand what these designations mean and what you can expect from each professional.

Most simply, the various designations that come after a financial professional’s name signify that she (or he) has prepared for and passed a standardized examination in her chosen field of study. And while that fact may qualify her to perform certain types of work, the designation alone isn’t reason enough to hire a professional.

“If I were telling someone what to look for in an adviser, the designations would be pretty far down on the list,” says Derek Gabrielsen, CRPC, wealth advisor with Strategic Wealth Partners in Independence, Ohio. “Yes, they are great to have. Yes, they give instant credibility. But just because someone is a CFP doesn’t mean they will be a good fit with you personally and doesn’t mean they will necessarily pick the best investments for you. The right designation is a great prerequisite, but should really be the starting point.”

Here’s your guide to deciphering these financial designations and figuring out which professional is right for you.

CPA. This designation stands for Certified Public Accountant and means that a person has passed the Uniform Certified Public Accountant exam and maintained annual continuing education requirements. Many small accounting firms prepare income taxes for individuals and businesses, as well as provide auditing services for corporations.

If you are audited by the Internal Revenue Service, a CPA can represent you, as can an attorney or an Enrolled Agent. A CPA designation is required for performing some corporate accounting duties, such as auditing a financial statement. But if you simply need help preparing your personal taxes, it isn’t always necessary to hire a tax preparer with the letters “CPA” after his name. Many bookkeepers and tax preparation professionals can get the job done expertly and at a lower price than you’d have to pay a CPA.